kapital98 wrote:Is there a credible reason why your not using Grad+ loans?

Do you have a well established line of credit that will allow a substantially lower interest rate?

GradPLUS loans are absolutely outrageous. I wish I had gone private - my interest costs would be about half of what they are, and no banks will do private consolidation of federal loans.

Can you elaborate a bit on this? I'm curious.

My understanding is that, with strong credit an/or a cosignor, finding 4-5% (or lower) private loans is possible. Half of my GradPLUS loans are 8.5% and half are 7.9%. Obviously I'd rather have the lower rate

When I say that no banks will do private consolidation of the student loans, I mean that no bank will give you a $170k loan at, say, 5%, even if you can show them your Biglaw offer and such. Very frustrating, and kind of ridiculous that schools push the fed loans so much.

kapital98 wrote:Is there a credible reason why your not using Grad+ loans?

Do you have a well established line of credit that will allow a substantially lower interest rate?

GradPLUS loans are absolutely outrageous. I wish I had gone private - my interest costs would be about half of what they are, and no banks will do private consolidation of federal loans.

Can you elaborate a bit on this? I'm curious.

My understanding is that, with strong credit an/or a cosignor, finding 4-5% (or lower) private loans is possible. Half of my GradPLUS loans are 8.5% and half are 7.9%. Obviously I'd rather have the lower rate

When I say that no banks will do private consolidation of the student loans, I mean that no bank will give you a $170k loan at, say, 5%, even if you can show them your Biglaw offer and such. Very frustrating, and kind of ridiculous that schools push the fed loans so much.

NO. You're absolutely wrong about this one.

Unless you have wealthy parents a private lender will not hand out student loans with a lower interest rate. A 7.9% interest rate is high but not as bad as a private lender. Obviously, if your parents have an excellent portfolio and wish to cosign your loans then a private lender makes sense. In almost every other circumstance they do not.

The gov't 7.9% interest rate is actually an implicit subsidization of education. It provides a lower interest, guaranteed no matter your personal circumstances, at a rate private lenders are unwilling to give.

Unless you have wealthy parents a private lender will not hand out student loans with a lower interest rate. A 7.9% interest rate is high but not as bad as a private lender. Obviously, if your parents have an excellent portfolio and wish to cosign your loans then a private lender makes sense. In almost every other circumstance they do not.

The gov't 7.9% interest rate is actually an implicit subsidization of education. It provides a lower interest, guaranteed no matter your personal circumstances, at a rate private lenders are unwilling to give.

Wrong. The rates are variable but they are significantly less right now.

Unless you have wealthy parents a private lender will not hand out student loans with a lower interest rate. A 7.9% interest rate is high but not as bad as a private lender. Obviously, if your parents have an excellent portfolio and wish to cosign your loans then a private lender makes sense. In almost every other circumstance they do not.

The gov't 7.9% interest rate is actually an implicit subsidization of education. It provides a lower interest, guaranteed no matter your personal circumstances, at a rate private lenders are unwilling to give.

Wrong. The rates are variable but they are significantly less right now.

to be fair, I would not take a variable rate loan for student loans. Although I suppose the fed has said rates will stay low through 2013, that's not long enough for people looking to take loans out now.

Unless you have wealthy parents a private lender will not hand out student loans with a lower interest rate. A 7.9% interest rate is high but not as bad as a private lender. Obviously, if your parents have an excellent portfolio and wish to cosign your loans then a private lender makes sense. In almost every other circumstance they do not.

The gov't 7.9% interest rate is actually an implicit subsidization of education. It provides a lower interest, guaranteed no matter your personal circumstances, at a rate private lenders are unwilling to give.

Wrong. The rates are variable but they are significantly less right now.

to be fair, I would not take a variable rate loan for student loans. Although I suppose the fed has said rates will stay low through 2013, that's not long enough for people looking to take loans out now.

Agreed, but the poster above me was claiming that private loans had much higher interest rates.

I applied for a private loan and have good credit (in the 780s/790s), the variable rate they offered was no lower than grad plus fixed rate which I thought was complete horse shit. I don't know what you need to qualify for the lowest possible rate, but it probably involves having enough equity/income to pay for grad school in full without financing. Compared with real estate loans, student loans are a complete rip off. You would think making them non-dischargeable would lower the rates, not raise them well above the level of the market rate for other financing needs.

bdubs wrote:I applied for a private loan and have good credit (in the 780s/790s), the variable rate they offered was no lower than grad plus fixed rate which I thought was complete horse shit. I don't know what you need to qualify for the lowest possible rate, but it probably involves having enough equity/income to pay for grad school in full without financing. Compared with real estate loans, student loans are a complete rip off. You would think making them non-dischargeable would lower the rates, not raise them well above the level of the market rate for other financing needs.

I'll bet your private lender was Discover. They won't give low rates to anyone even though they say they offer P plus 1/2